Litigation Release No. 21161 / July 31, 2009

Securities and Exchange Commission v. Steven E. Tennies and Price Geld & Company, Inc., Case No. 3:09-cv-370 (D. Idaho filed July 30, 2009)


The Securities and Exchange Commission today charged an Idaho investment adviser with operating a Ponzi scheme in which he stole more than $1.5 million from investors through an investment fund that he managed.

The SEC alleges that Steven E. Tennies and his company, Price Geld & Company, fraudulently obtained millions of dollars from dozens of investors in several states by selling limited partnership interests in his now defunct Adeona Fund. Instead of investing the money as he claimed he would, Tennies siphoned money out of the fund for personal use. To conceal his fraud, Tennies gave investors fabricated tax documents and account statements claiming phony returns.

The SEC's complaint, filed in the U.S. District Court for the District of Idaho, alleges that Tennies told investors that they could expect positive returns during all market cycles through a proprietary trading strategy in liquid and exchange-traded securities. Tennies then allegedly led investors to believe that their money was invested in the Adeona Fund and that the fund was posting consistent, positive returns.

The SEC alleges that Tennies actually commingled investor funds with his personal accounts and used fund assets to pay his personal expenses, which included hundreds of thousands of dollars toward a divorce settlement, the mortgage on a custom-built home, rare first-edition books and artwork, and financing a car business. Tennies then allegedly paid investors in Ponzi-like fashion to keep his scheme afloat, using funds from new investors to pay returns to other investors.

Tennies and Price Geld agreed to settle the SEC's claims against them, including violations of the antifraud provisions of the federal securities laws under Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and Sections 206(1), 206(2) and 206(4) of the Investment Advisers Act of 1940 and Rule 206(4)-8 thereunder. Tennies and Price Geld agreed to settle these claims and consented to the entry of a judgment, subject to approval by the court, that enjoins them from violating the antifraud and registration provisions of the federal securities laws. Tennies also agreed to pay more than $1.7 million in disgorgement and prejudgment interest.

The U.S. Attorney's Office for the District of Idaho filed an information charging Tennies with four counts of mail fraud in connection with this same scheme. On July 29, before visiting U.S. District Court Judge Larry Burns (California) in Coeur d'Alene, Idaho, Tennies entered a guilty plea to four counts of mail fraud and agreed to forfeiture of approximately $1.5 million. The sentencing is set for October 19, 2009, at 10:00 a.m., before Chief U.S. District Court Judge B. Lynn Winmill in Coeur d'Alene, Idaho.

The Commission acknowledges the assistance and cooperation of the United States Attorney's Office for the District of Idaho and the FBI in this matter.

SEC Complaint